CE & M- Methods of Dispute Resolution
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Transcript of CE & M- Methods of Dispute Resolution
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
METHODS OF DISPUTE RESOLUTION
Associate Professor
Dr. Rafiq Muhammad ChoudhryBSc(Civil-Honor), MSc(CEM), PhD(MSE), Post-Doctorate (CEM), MIE(Pak), PE
Email: [email protected]/ [email protected]
Head, Department of Construction Engineering and Management-NIT
School of Civil and Environmental Engineering (SCEE)
National University of Sciences and Technology (NUST)
Sector H-12, Islamabad
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected] -
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
MECHANISMS TO RESOLVE
CONTRACTUAL DISPUTES
Traditional Methods
Negotiation
Arbitration Litigation
Alternative Dispute Resolution (ADR)
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
In litigation the parties take their disputes toCourts of Law for their resolution.
Litigation is a lengthy process (time consuming)
At times it becomes an endless process.Judgment by Court of original jurisdiction is
followed by a series of appeals/reviews/ revisions
in the hierarchy of Courts of Appeal
LITIGATION
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ALTERNATIVE METHODS
FOR DISPUTE RESOLUTION
Methods available to a contractor for resolution ofconstruction disputes.
Figure: Construction Claims Resolution Alternatives - LITIGATION.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
MECHANISMS TO RESOLVE
CONTRACTUAL DISPUTES
Alternative Dispute Resolution (ADR)
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ALTERNATIVE DISPUTE RESOLUTION (ADR)
Process and Technique that fall outside the Judicialprocess followed by Courts.
- ADR is generally classified into following sub-types:- Negotiation
- Mediation
- Conciliation
- Arbitration
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ALTERNATIVE METHODS
FOR DISPUTE RESOLUTION
Methods available to a contractor for resolution ofconstruction disputes.
Figure: Construction Claims Resolution Alternatives - NEGOTIATION.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
Participation is voluntary No third party is involved to facilitate the resolution
process.
Mediation
Arbitration Third party is involved
Conciliation
NEGOTIATION
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
(a form of settlement negotiation facilitated by aneutral third party) and non-binding resolution )
An act of bringing two parties in dispute closertogether toward agreement through alternative
dispute resolution (ADR), a dialogue in which a
neutral third party, the mediator, using appropriate
techniques, assists two or more parties to help themnegotiate an agreement on a matter of common
interest.
MEDIATION
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ALTERNATIVE METHODS
FOR DISPUTE RESOLUTION
Methods available to a contractor for resolution ofconstruction disputes.
Figure: Construction Claims Resolution Alternatives - MEDIATION.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
An alternative dispute resolution (ADR), processwhereby the parties to a dispute agree to utilize the
services of conciliator who meets with the parties in
an attempt to resolve their differences
Main goal is to conciliate by seeking concessions
CONCILIATION
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
Conciliation is an ADR process whereby theparties to a dispute agree to utilize the services
of a conciliator, who then meets with the parties
separately in an attempt to resolve their
differences.
He/She does this by lowering tensions, improving
communications, interpreting issues, providingtechnical assistance, exploring potential solutions
and bringing about a negotiated settlement.
CONCILIATION
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
Conciliation differs from arbitration in that theconciliation process, in and of itself, has no legal
standing, and the conciliator usually has no authority
to seek evidence or call witnesses, usually writes no
decision, and makes no award.
Conciliation and Arbitration
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
Conciliation differs from mediation in that the main goal is toconciliate, most of the time by seeking concessions. In
mediation, the mediator tries to guide the discussion in a way
that optimizes parties needs, takes feelings into account and
reframes representations.
In conciliation the parties seldom, if ever, actually face each
other across the table in the presence of the conciliator.
Conciliation and Mediation
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
About:
Certification
Valuations
Instructions Determination
Opinion
Dispute
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
NOTICE OF DISPUTE
ENGINEER DECISION
AMICABLE SETTLEMENT ARBITRATION
DISPUTE SETTLEMENT UNDER FIDIC - 1992
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
DISPUTE ADJUDICATION BOARD (DAB)
DISPUTE REVIEW BOARD (DRB)
DAB & DRB
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ARBITRATION
A legal technique for the resolution of disputes
outside the court where in the parties to a dispute
refer it to one or more persons by whose decisionthey agree to be bound
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ALTERNATIVE METHODS
FOR DISPUTE RESOLUTION
Methods available to a contractor for resolution ofconstruction disputes.
Figure: Construction Claims Resolution Alternatives - ARBITRATION.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
An ancient practice Under English law, the first law on arbitration was
the Arbitration Act,1697.
HISTORY OF ARBITRATION
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ARBITRATIONS UNDER VARIOUS LAWS &
PROCEEDURAL RULES
ARBITRATION UNDER LOCAL LAW
INTERNATIONAL ARBITRATION
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
Any dispute shall be finally settled under theprovisions of the Arbitration Act, 1940 as amended
thereof for the time being in force.
The said arbitrator/s shall have full power to open up,
review and revise any decision, opinion, instruction,
determination, certificate or valuation of the Engineer
related to the dispute.
MODEL ARBITRATION CLAUSE LOCAL ARBITRATION
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
Any dispute .. shall be finally settled, unlessotherwise specified in the Contract, under the Rules
of Conciliation and Arbitration of the International
Chamber of Commerce by one or more arbitrators
appointed under such Rules.
The said arbitrator/s shall have full power to open up,
review and revise any decision, opinion, instruction,
determination, certificate or valuation of the Engineerrelated to the dispute.
MODEL CLAUSE FOREIGN ARBITRATION
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ARBITRATION
UNDER ARBITRATION ACT, 1940
ARBITRATION PROCEEDINGS
CIVIL COURT ACTIONS UNDER ARBITRATIONACT, 1940
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
Popular Arbitration Procedures followed in
Pakistan
No particular arbitration procedure has been
prescribed by the Arbitration Act, 1940. In the absence
of a standardized arbitration procedure, the arbitration
under the local law usually follows any one of the
following two procedures with the consent of parties:
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
(i) Reliance on Documentary Evidence
Reference of Dispute (Statement of Claim) filed by the
Claimant > Written Reply (Statement of Defense) filed
by Respondent > Rejoinder filed by Claimant >Framing of Issues > Document submittal by both parties >Written Submittal > Arguments > Award.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
a) Filing of Award in the Court: At the requestof any party to the arbitration agreement or any
person claiming under such party or if so directed
by the Court the arbitrator (s) umpire shall causethe award or a signed copy of it to be filed in the
Court. Together with the award any depositions
or documents which may have been taken and
proved before them are also filed in the Court
1. COURT ACTIONS UNDER ARBITRATION ACT, 1940
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
Once the arbitration award has been filed in theCourt for making it rule of the Court, the Court
issues Notice of Filing of Award in the Court.
This notice is served upon all the parties to thearbitration award. Any party willing to file
objections against the award for setting it aside or
wishing that the award be corrected or remitted
back to the arbitrator for reconsideration can doso within the prescribed period of limitation
2. COURT ACTIONS UNDER ARBITRATION ACT, 1940
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
3. COURT ACTIONS
UNDER ARBITRATION ACT, 1940
Where the Court sees no cause to remit the award or any of the
matters referred to arbitration for reconsideration or to set aside the
award, the Court proceeds to pronounce judgment according to the
award, and upon the judgment so pronounced a decree follows and
no appeal lies from such decree except on the ground that it is in
excess of or not otherwise in accordance with the award.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
The Court passes such judgement afterthe time for making an application to set
aside the award has expired.
4. COURT ACTIONS UNDER ARBITRATION ACT, 1940
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
Appointment of arbitrator Removal of arbitrator
Stay of Legal Proceedings
Setting aside the Award Enlargement of time for making the award
5. COURT ACTIONS UNDER ARBITRATION ACT, 1940
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ARBITRATION OR LITIGATION?
Almost all construction contracts include provisions
for binding arbitration of future disputes. Parties to the construction process often gain a false
sense of security from having an arbitration clause in
their contracts. Under both arbitration and litigation, the parties areasking an outside party to resolve their disputes.
Common sense dictates that the quickest, most
economical way is for the parties to resolve thedispute themselves, without intervention of others.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ARBITRATION OR LITIGATION?
Inconsistent Results
Arbitrators are not bound by rules of evidence, orfor any previously rendered decisions.
A court is obligated to be bound by previous decisions
rendered for similar circumstances.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
ARBITRATION OR LITIGATION?
Speedy Results?
Arbitration hearings are not normally held on a day-to-day basis, and it is rare to be able to schedule
more than two hearings on consecutive days.
An arbitration that involves four days of hearings may
actually take two or three months.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
THE MEDIATION PROCESS
Why is a Mediator Needed?
A mediator is needed when one or more of thefollowing circumstances exist:
5. It is desired to furnish the parties with a realistic look
at the demands and possibility of obtaining them.
6. There is a wish to give the parties some idea of howtheir positions look to an impartial person.
7. The parties wish a mediator to be used as a conduit
through which private, confidential disclosures can be
made without jeopardizing their original positions. 8. There is a wish to avoid negative consequences, such
as a lawsuit.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
THE MEDIATION PROCESS
Mediation as Distinguished from Arbitration
Like arbitration, mediation is a private, unofficialmeans of dispute resolution.
Like arbitration, it is generally favored by modern law.
It generally promises savings in time and cost as compared
with civil litigation.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
THE MEDIATION PROCESS
Mediation as Distinguished from Arbitration
Mediation & arbitration differ in a number of ways: 4. The arbitrator avoids all exparte communication with the
parties on the merits of the dispute or the parties' positions.
The mediator will nearly always assemble privately with each
party to learn as much as they are willing to disclose withrespect to the dispute.
5. While arbitration is a private proceeding, information
about it may become public in some circumstances.
As when a losing party seeks to have a court vacate the award. Mediations are settlement discussions, and, as such, some
information about them is inadmissible.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
THE MEDIATION PROCESS
Mediation as Distinguished from Arbitration
Mediation & arbitration differ in a number of ways: 6. The arbitrator imposes a decision upon the parties that
he/she has made, which please neither party.
The mediator, if successful, guides parties to a decision
that they can have a major role in shaping. And with which, by definition, they both agree.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
THE MEDIATION PROCESS
Use of Mediation as a Dispute Resolution Tool
Mediation is generally used first, and its use mayprecede either arbitration or litigation.
It may be used even afteran arbitration or litigation.
Butpriorto an award.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
SETTLEMENT OF DISPUTES BY ARBITRATION
Business Disputes
In the world of business, disputes are inevitable,as one person may understand rights & obligations
differently from another.
No matter how carefully a contract is written.
When disputes arise out of day-to-day activities,
parties frequently like to settle privately & informally.
This is what commercial arbitration is for.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
SETTLEMENT OF DISPUTES BY ARBITRATION
What is Arbitration?
Arbitration is the voluntary submission of a disputeto one or more impartial persons for final and binding
determination.
It is private and informal, designed for quick, practical,
inexpensive settlements. An orderly proceeding, governed by rules of procedure
and standards of conduct prescribed by law.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
SETTLEMENT OF DISPUTES BY ARBITRATION
What is Arbitration?
Arbitrators are experts, whose decisions representtheir judgments of the rights of the parties to a
dispute.
The guiding principle is to hear all material evidence
& notto hear arguments/evidence from one side on
which the other has no opportunity to comment/rebut.
A significant difference between court action & arbitrationis that, in arbitration, strict rules of evidence do not apply.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
SETTLEMENT OF DISPUTES BY ARBITRATION
What is Arbitration?
Most arbitration cases are heard by a panel of threearbitrators, each usually representing a different field
of specialization.
Governed by majority rule, both in procedural decisions
and in rendering the award.
When three-person boards are used, it is customary
for one of the arbitrators to serve as a chairperson.
Whose powers are the same as those of the other two.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
SETTLEMENT OF DISPUTES BY ARBITRATION
Authority of the Arbitrator
This decision-making authority must be exercised bythe arbitrator alone to the best of its ability.
It may not be delegated to others.
Broad powers to determine matters of fact, law & procedure.
Under rules of arbitration, the award must be in
writing & represent the judgment of at least the
majority of the board. Unless the contract requires a unanimous decision.
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Dr. Rafiq Muhammad Choudhry
Head, Department of Construction Engineering & Management, NIT, SCEE, NUST
SETTLEMENT OF DISPUTES BY ARBITRATION
Arbitration Agreements Regulated by Law
Arbitration agreements are recognized by statute bythe Arbitration Act 1940.
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Thank You